China has begun imposing a 13 percent sales tax on contraceptives, including condoms, birth control pills, and other devices, effective January 1, 2026, while exempting childcare-related services from value-added tax (VAT).
The move is part of a wider tax overhaul announced in late 2025, which removes long-standing exemptions that had been in place since 1994. At the time, China was strictly enforcing its decades-long one-child policy, aimed at limiting population growth, according to the BBC.
Under the revised tax structure, childcare services, marriage-related services, and elderly care are now exempt from VAT. Authorities say the changes are intended to support family formation and reduce the financial burden associated with raising children.
Why China Abandoned the One-Child Policy
January 1, 2026, marks ten years since China formally scrapped the one-child policy, which was introduced in 1980 to curb rapid population growth. The government feared that unchecked population expansion could undermine efforts to lift the country out of poverty.
For decades, the policy was enforced through a vast state apparatus involving propaganda campaigns, heavy fines, harassment, and in some cases, forced abortions and sterilisations. However, as birth rates declined sharply, authorities acknowledged that population shrinkage posed a serious threat to long-term economic growth. This led to the policy’s repeal in 2016, according to CNN.
Why Pro-Birth Policies Have Failed So Far
Despite rolling out incentives to encourage families to have more children, China’s population has continued to decline. According to Reuters, the population fell for a third consecutive year in 2024, with experts warning the trend is likely to persist.
China is also facing a rapidly ageing population. CNN reports that more than 20 percent of China’s 1.4 billion people are now aged over 60, a figure the United Nations projects could rise to nearly half by the year 2100.
The High Cost of Raising Children
High living costs remain one of the biggest deterrents to childbearing. A 2024 report by the YuWa Population Research Institute in Beijing found that China is among the most expensive countries in the world to raise a child, with education costs being a major driver.
Economic uncertainty has further worsened the situation. A prolonged economic slowdown, exacerbated by a property crisis that has eroded household savings, has left many families hesitant to commit to having children. Beyond financial concerns, experts say addressing youth unemployment and the unequal burden of childcare on women is critical to boosting birth rates.
Concerns Over the New Tax Policy
The decision to tax contraceptives has sparked criticism and ridicule, with observers warning it could increase the risk of unwanted pregnancies and the spread of HIV. Critics argue that higher condom prices are unlikely to convince reluctant couples to have children.
In recent years, local governments have introduced a range of incentives, including tax breaks, housing subsidies, cash handouts, and extended maternity leave. However, reports of women receiving calls from community workers asking about their plans to have children have raised concerns that pro-natalist policies could become coercive, according to CNN.
Reuters notes that while Beijing has clearly shifted towards promoting marriage and childbirth, the effectiveness of this dramatic policy reversal remains uncertain, as economic pressures and social realities continue to weigh heavily on young families.
